KDP has sought to revive coffee capsules sales with high-profile brand partnerships, home compostable and iced ranges | Photo credit: Keurig Dr Pepper

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KDP’s coffee segment continues to trail its better-performing soft drinks business. 
 
Announcing its results for the second quarter ended 30 June 30 2024, KDP reported net sales grew 3.5% to $3.9bn, with GAAP net income rising 2.4% to $515m compared to the same period in 2023. 
 
Net sales for KDP’s soft beverages category, which includes the Dr Pepper, 7UP, Sunkist and Canada Dry brands, grew 3.3% to $2.4bn driven by volume/mix growth of 0.4%.
 
However, KDP’s US coffee segment has yet to regain momentum following a slow-down in the US at-home coffee market in 2023, with net sales falling 2.1% to $1bn following a 2.9% decline in pricing. 
 
In a sign that KDP’s focus on value-led products and branded coffee capsule partnerships have yet to move the dial on a 3.6% fall in coffee sales in 2023, K-Cup Pod shipments grew just 0.2% in the second quarter, with brewer shipments for the 12 months ending 30 June 2024 rising 1.4% year-on-year to reach 10.1 million. 
 
Nevertheless, KDP CEO Tim Cofer said the business was on track to achieve its long-term goals. 
 
“Our second quarter results were healthy, with accelerating net sales trends, significant margin expansion, and solid EPS growth. Strong execution drove our performance, as we continued to advance our long-term strategic agenda… Now halfway through 2024, we are on track to achieve our unchanged full year outlook, while also seeding initiatives to fuel consistent growth over multiple years,” Cofer said.  
 
Cofer’s predecessor Bob Gamgort previously stated the importance of US premium coffee capsule market for KDP, emphasising that affordability would be crucial to support a US at-home coffee recovery and return the single-serve category to its long-term growth trend.
 
KDP has been steadily building its licensed coffee capsule portfolio, notably by expanding an agreement with Lavazza to manage e-commerce and retail distribution for branded K-Cup capsules in North America. 
 
Further efforts to reinvigorate the category include a new line of home compostable coffee capsules and the ‘QuickChill’ iced coffee machine system. 
 
KDP also manages Starbucks, Dunkin’, Peet’s Coffee, McCafé, Tim Hortons, Krispy Kreme, Caribou Coffee, La Colombe Coffee Roasters, and Intelligentsia Coffee-branded capsules. 
 
Keurig Dr Pepper was formed in 2018 following the $18.7bn merger of JAB Holding Company’s Keurig Green Mountain-Dr Pepper. The coffee and soft drinks group is part of JAB’s extensive coffee investment portfolio, which also includes JDE Peet’s, Panera Brands, Pret A Manger and Espresso House. 
 
In April 2024, Luxembourg-based JAB announced plans to lower its stake in KDP in a bid to raise approximately $2.5bn.